Fundamental Accounting Principles 22th Edition by John Wild ,Ken Shaw,Barbara Chiappetta

Exercise 26

Bug-Off Exterminators provides pest control services and sells extermination products manufactured by other companies. The following six-column table contains the company's unadjusted trial balance as of December 31, 2015.


Required
1. Use the preceding information to determine amounts for the following items.
a. Correct (reconciled) ending balance of Cash, and the amount of the omitted check.
b. Adjustment needed to obtain the correct ending balance of the Allowance for Doubtful Accounts.
c. Depreciation expense for the truck used during year 2015.
d. Depreciation expense for the two items of equipment used during year 2015.
e. The adjusted 2015 ending balances of the Extermination Services Revenue and Unearned Services Revenue accounts.
f. The adjusted 2015 ending balances of the accounts for Warranty Expense and Estimated Warranty Liability.
g. The adjusted 2015 ending balances of the accounts for Interest Expense and Interest Payable. (Round amounts to nearest whole dollar.)
2. Use the results of part 1 to complete the six-column table by first entering the appropriate adjustments for items a through g and then completing the adjusted trial balance columns. ( Hint: Item b requires two adjustments.)
3. Prepare journal entries to record the adjustments entered on the six-column table. Assume Bug-Off's adjusted balance for Merchandise Inventory matches the year-end physical count.
4. Prepare a single-step income statement, a statement of owner's equity (cash withdrawals during 2015 were $10,000), and a classified balance sheet.